Wednesday 29th June 2011
Good morning. Sterling has hit a 2 month low vs the Euro this morning, as the single currency has gained significant support ahead of the Greek vote on austerity measures. At 08:30am this morning rates are as follows:
Sterling hits 8 week low vs Euro
- GBP/EUR 1.1116
- GBP/USD 1.6008
- GBP/AUD 1.5133
- GBP/NZD 1.9590
- GBP/CAD 1.5680
- GBP/CHF 1.3289
- GBP/ZAR 10.941
- GBP/JPY 129.65
- GBP/DKK 8.2875
- GBP/NOK 8.6686
- EUR/USD 1.4396
The pound is at a 2 month low vs the Euro this morning, and the lowest in over a year against a currency basket. This is because the Bank of England have renewed the possibility of further Quantitative Easing and data showing very slow growth in the UK.
We saw figures yesterday showing that the economy only grew by 0.5% in the first quarter, and annual growth has also been revised down. The UK data added to the view that UK interest rates are likely to stay at their record low 0.5 percent well into next year. Also some BoE policymakers, speaking in parliamentary testimony, mentioned the possibility of more quantitative easing if the economy stayed fragile.
More Quantitative easing signals worries over the economy and Sterling has suffered as a result. Policymakers' opinions differed, however. David Miles said more asset purchases could be an option for the future, while BoE Deputy Governor Paul Tucker said there was not a uniform move towards more QE. The lack of consensus just goes to show how fragile things are at the moment.
UK data today is in the form of Consumer Credit, Mortgage Approvals, Consumer Confidence and Money Supply. Recent UK data has been very gloomy, and further poor data could push Sterling lower. From the Eurozone we have measures of economic, industrial and consumer confidence all of which could affect GBP/EUR rates.
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Labels: BoE, Greek debt, Quantitative Easing